Page 10 - GLNGl Week 24

GLNG COMMENTARY GLNG

Russia bets on gas in new strategy

Russia’s new energy strategy that targets major gains in gas output, which will be largely

driven by LNG exports

POLICY RUSSIA has approved a new national energy Novatek is developing a raft of new liquefaction
strategy up until 2035 (ES-2035) that targets big projects on the Yamal and neighbouring Gydan
WHAT: gains in gas production while forecasting that oil peninsulas in the Russian Arctic. The company
Russian gas production output will either remain stable or decline. has set a goal of producing 70mn tpy of LNG in
is expected to continue Whether these forecasts are realised will the region by the end of this decade.
growing between now and depend not only on the ability of Russian pro- Russia is also hoping to expand piped gas
2035, while oil extraction ducers to bring new fields online and maximise exports – both to Europe and China. ES-2035
will either remain flat or recovery at older ones, but also global demand assumes that Europe’s dependency on imports
decline, according to the trends. While these trends have been thrown will grow, although it recognises supply diversi-
country’s new energy into uncertainty by the coronavirus (COVID- fication and the rise of renewables as risks to its
strategy. 19) pandemic and efforts to accelerate the tran- market share. In any case, thanks to the recent
sition away from fossil fuels, Russia’s strategy launch of the TurkStream pipeline to Turkey
WHY: places more confidence in gas than it does on oil. and the anticipated start-up of the Nord Stream
The forecast reflects not This is line with international expectations. 2 next year, Russia will have enough transport
only how much supply The International Energy Agency (IEA), for capacity to meet extra European demand.
Russian producers can example, sees oil demand flattening out in the Meeting European needs will also require the
bring on stream but also 2030s, while gas consumption is anticipated to development of additional deposits on the Yamal
global demand trends. continue growing, partly at the expense of coal’s Peninsula. Gazprom currently produces gas at
share in the global energy mix. only one field in the region, Bovanenkovskoye,
WHAT NEXT: which is on its way to reaching its third-phase
The outlook for global gas Gas capacity of 115 bcm per year. But the company
consumption is brighter Russian gas production has risen steadily over wants to raise output at Bovanenkovskoye to
than for oil, helping the past two decades, from 590bn cubic metres above 140 bcm per year by exploiting its deeper
to explain Russia’s in 1999 to around 790 bcm last year. ES-2035, layers, while also bringing two fields into pro-
expectation that gas will approved by the government on June 9, calls for a duction in the coming years, Kharasaveyskoye
play a greater role in its further growth to 795-820 bcm per year by 2024 and Kamennomysskoye-more.
exports. and 860-1,000 bcm by 2035. Fresh from initiating piped gas flows to China
LNG, which until recently had only a minor in December via the Power of Siberia pipeline,
role in Russia’s gas mix, is expected to drive Gazprom is already drawing up plans to run a
production increases. Production of the super- second pipeline to its eastern neighbour, this
cooled gas is slated to rise to between 46mn time through Mongolia. This pipeline would be
and 65mn tonnes per year by 2024, and 80mn bigger, with a capacity of 50 bcm per year versus
and 140mn tpy by 2035, from just 30mn tpy last Power of Siberia’s 38 bcm.
year. Russia’s largest independent gas producer There is clearly political will for development

P10 www. NEWSBASE .com Week 24 19•June•2020